Mediation Considerations

The King County Superior Court requires mediation by a set date before trial. This is because statistics show over 90% of cases settle. This post discusses mediation considerations.

Why Mediate. Outside of the fact mediation may be mandatory, lawyers must ask why are we mediating. When the insurance company is taking a no liability or limited liability position, or when it is clear there is no serious appreciation of the value of the case, mediation is a waste of time. In such a case the lawyer should move to waive mediation or use a bargain basement mediator.

Reverse Psychology. Insurance companies are used to and therefore expect to see plaintiff lawyers try to settle cases before trial. They take this for granted and calculate the lawyer will settle for less then a good trial result. When the plaintiff lawyer ignores settlement and works the case with the intent to try the case the insurance company is caught off guard. This is not what it is used to seeing. This leads the insurance company to have a better appreciation for the case which in turn leads to higher case value.

When Mediation is Essential. When the case has been properly worked and is ready for trial, or when the insurance company wants to get out of the case, mediation is where you want to be. In fact the lawyer owes it to his client to mediate whenever there is an appreciation of the case. A case has two values: The most the insurance company will pay, and what the case will bring at trial. At mediation the lawyer gets his client the most the insurance company will pay. This may be equal to or greater then the trial value. And it is a sum certain without risk of being less.

Take Mediation Seriously. When the case has been properly worked and is ready for trial it has a high likelihood of settling. The lawyer needs to take mediation seriously as the amount offered is likely to be the highest yield for the case. Always submit a mediation memorandum. Have the client bound with the mediator. Create a sense of trust, confidence and belief in the mediator. Show the mediator you know he is doing everything possible to get the highest offer. Show the mediator you have confidence in your case. When he brings in the insurance company lines on case problems swat them away as this will be what he takes back to the insurance company. Never tell the mediator your bottom line and never show satisfaction with the insurance offer.

Possibility of High Low Agreement. Consider a high low agreement when it is evident there is substantial risk on both sides and the insurance company is offering a decent amount in mediation. Under the high low agreement the insurance company agrees to pay a minimum amount even if there is a defense verdict. In exchange plaintiff agrees to limit her recovery to the high amount even if there is a runaway verdict. In a first party case (insurance company is client’s company) the insurer should pay the low amount immediately.

When to Try the Case. Before the mediation have a realistic appraisal of the trial/arbitration value of the case. If the insurance company is substantially below this evaluation (even when increased costs of trial are considered) then try the case. At least in mediation you have gained a better understanding of how defense sees and will try the case. You have also done your job in determining the insurance company’s highest offer.

..Mediation helps resolve disputes between insurance companies and claimants people claiming accident benefits . ..A claimant or an insurance company can apply for mediation if they disagree about the claimants entitlement to accident benefits or the amount of benefits that should be paid.